Inside QSR
Blackstone paid $8B for Jersey Mike's. Roark dropped $1B on Dave's Hot Chicken and $9.6B on Subway. Five Guys bought back 106 franchise locations. Here is what the pattern tells multi-unit operators about what PE firms actually value.
By Justin K. Sellers · 10 min read · February 26, 2026
Private equity just spent $18.6 billion on three QSR brands.
Not three hundred brands. Three.
Blackstone paid $8 billion for Jersey Mike's. Roark Capital dropped $1 billion on Dave's Hot Chicken and $9.6 billion on Subway.Meanwhile, Five Guys quietly spent $200 million buying back 106 locations from its own franchisees.
These aren't random deals. They're a pattern.
And if you're a multi-unit operator, the pattern matters more than the price tags.
Jersey Mike's sold for $8 billion in January 2025.
Here's what Blackstone got: - 3,100 locations - $3.4 billion in systemwide sales - $1.3 million average unit volumes - 24% average annual growth over five years
That growth rate is worth examining more closely.
Not the location count. The growth rate.
Jersey Mike's AUVs are more than double Subway's. Blackstone paid roughly $2.6 million per unit for Jersey Mike's — compared to roughly $260,000 per unit for Subway's $9.6 billion deal across approximately 37,000 locations.
That works out to a 10x per-unit premium — suggesting unit-level performance drove the valuation.
Peter Wallace, senior managing director at Blackstone, said it directly: "Jersey Mike's has grown for more than a half century by maintaining an unrelenting focus on quality."
Quality. Not quantity. The same principle that built Chick-fil-A from a $6,400 diner into a $22.7 billion brand — conviction about quality before scale.
Dave's Hot Chicken went from a parking lot popup in 2017 to a $1 billion acquisition in 2025.
315 locations. $617 million in sales. 57% year-over-year growth.
But here's the number that explains the billion-dollar price tag: $3 million average unit volumes.
For context, Dave's $3 million AUVs are roughly double the typical fast-casual benchmark.
We stand alone within their portfolio and that was on purpose. We expect to be a super high performer, like, the new rock star within the portfolio. — Jim Bitticks, President, Dave's Hot Chicken
The unit economics — not the brand logo — drove the valuation.
For twenty years, the QSR playbook was simple: sell company stores to franchisees. Go asset-light. Let franchisees handle the operations headaches.
Burger King did it. Wendy's did it. McDonald's did it.
Then Five Guys did the opposite.
In 2022, Five Guys bought back 106 locations from Encore Restaurants — its largest U.S. franchisee — for $200 million. The deal happened in four tranches: March, May, June, and August.
QSR Magazine reported the company "acquired the locations to increase control as it expanded internationally."
Control.
Not growth. Not efficiency. Control.
Five Guys went from 979 franchised locations at the end of 2022 to 924 heading into 2025. They didn't expand the franchise fleet. They shrunk it.
The company didn't comment. But the move tells you something.
When a brand decides it needs tighter control over how locations are operated, buying them back is the most direct path — though Five Guys hasn't publicly stated its reasoning.
Whataburger operates differently than most chains.
As of year-end 2021: 742 company-owned locations, 131 franchised.
That's 85% corporate ownership.
When BDT Capital bought majority control in 2019, that ratio was already in place. The Dobson family had maintained it for decades.
Then in 2020, BDT opened franchising to new operators for the first time in twenty years.
James Turcotte, Whataburger's chief development officer, explained why: "Franchising allows us to open more stores in more areas and do that faster and efficiently."
But they didn't flip the model overnight. They're still predominantly company-owned.
Some brands never refranchised at all. Arby's, Panera, Chili's — they stayed corporate.
Why?
Because when you own the stores, you control the operations. And when you control the operations, you control the outcomes.
PE firms paid billions. The common thread in those deals appears to be brands that deliver specific results.
Jersey Mike's: $1.3M AUVs, 24% annual growth, 62% unit volume increase over five years Dave's Hot Chicken: $3M AUVs, 57% year-over-year sales growth Subway: Second-largest chain globally by location count (but lower per-unit performance)The pattern is clear: they're buying unit economics, not unit counts.
David Henkes, senior principal at Technomic, said it plainly when talking about Whataburger: "They have a leg up on the competition because of relatively high-quality ingredients and the loyalty of its existing customer base."
Not: "They have a lot of stores."
Not: "They're growing fast."
"High-quality ingredients" and "loyal customer base."
Those factors appear to be what drives unit economics.
Here's what we know for sure:
Five Guys bought back 106 franchised locations and transitioned them to corporate operations. Their franchise fleet shrank while their corporate fleet grew.
Whataburger maintained 85% company ownership through 69 years of family control and through a PE acquisition.
Some major brands — Arby's, Panera, Chili's — never refranchised in the first place.
Here's what we don't know:
- Why Five Guys spent $200 million buying back what franchisees were already operating - What specific operational issues, if any, prompted that decision - Whether the international expansion rationale was the primary driver or a secondary benefit - How those 106 locations are performing now compared to when Encore ran them
The companies won't comment. The data doesn't say.
But the transaction happened. And it happened in the opposite direction of twenty years of industry trends.
When Blackstone announced the Jersey Mike's deal, they didn't talk about expansion plans first. They talked about "quality."
When Roark bought Dave's Hot Chicken, they weren't buying 315 locations. They were buying $3 million AUVs.
When Five Guys bought back 106 stores, they weren't buying growth. They were buying control.
PE firms are betting that certain brands can scale profitably — not just scale.
The difference? Operational systems that actually work.
Larry Reinstein, CEO of LJR Hospitality Ventures, explained the franchising risk: "In decades past, Whataburger has been bruised by repeated litigation with franchisees."
Franchising works when franchisees and franchisors are aligned. When that alignment breaks down — for any number of reasons — brands face a choice: accept operational variance or reclaim control.
Five Guys chose option two.
The PE acquisition wave isn't about buying brands. It's about buying brands they can operate at scale.
Flynn Restaurant Group became the largest franchisee in the U.S. by acquiring struggling Applebee's locations, improving operations, and generating cash.
Multi-unit operators with strong unit economics, low turnover, and proven systems are acquisition targets. Operators without those systems are competing against better-capitalized groups with better infrastructure. For operators who want institutional capital without giving up control, Franchise Equity Partners has built a $1 billion permanent minority capital model specifically for profitable multi-unit operators who want a partner, not a buyout.
The industry average turnover rate exceeds 100% annually. If you're at or above that, you're bleeding money on recruiting and training every time a GM walks out the door.
The brands commanding premium valuations — Jersey Mike's, Dave's Hot Chicken — aren't just growing. They're growing with unit economics that support expansion. Compare that with Wonder's 100+ location Texas bet — where scale comes before proven unit economics.
Scaling without proven unit-level economics is significantly harder. The $18.6 billion in deals says PE firms already know that.
Blackstone paid $8 billion for Jersey Mike's in January 2025, citing the brand's unrelenting focus on quality. The deal covered 3,100 locations with $3.4 billion in systemwide sales, $1.3 million average unit volumes, and 24% average annual growth over five years. The per-unit valuation was approximately $2.6 million — roughly 10x the per-unit price Roark paid for Subway locations. Blackstone was not buying unit count. It was buying unit economics and a growth rate that had held for half a decade.
Why did Roark Capital buy Dave's Hot Chicken?Roark Capital acquired Dave's Hot Chicken for $1 billion in 2025. The brand had 315 locations, $617 million in sales, 57% year-over-year growth, and $3 million average unit volumes — roughly double the typical fast-casual benchmark. Unit economics drove the valuation, not unit count. Dave's went from a parking lot popup in 2017 to a billion-dollar acquisition in eight years.
Why did Five Guys buy back its franchise locations?In 2022, Five Guys bought back 106 locations from its largest U.S. franchisee, Encore Restaurants, for $200 million across four tranches. The franchise fleet shrank from 979 to 924 locations as a result. The company did not publicly state its reasoning, but the pattern is consistent with brands that prioritize operational consistency and control over franchise fleet growth.
What do PE firms look for when buying QSR brands?Based on the $18.6 billion in deals analyzed here, PE firms prioritize unit economics over unit count. Jersey Mike's had $1.3M AUVs and 24% annual growth. Dave's Hot Chicken had $3M AUVs and 57% sales growth. The common thread is brands that can scale profitably — not just scale. Flynn Restaurant Group, the largest franchisee in the U.S. by unit count, built its position by acquiring struggling locations, improving operations, and generating cash. That same operating discipline is what PE buyers are paying premiums for.
What is Whataburger's ownership structure?Whataburger maintained approximately 85% company-owned locations through 69 years of family ownership and through a PE acquisition by BDT Capital in 2019. The brand opened franchising to new operators in 2020 for the first time in twenty years, while maintaining its predominantly corporate model. That ownership structure is a deliberate choice about quality control — not a missed franchise opportunity.
What does the PE acquisition wave mean for franchise operators?PE firms are buying brands with strong unit economics, operational consistency, and control. Multi-unit operators with low turnover, strong AUVs, and proven systems are increasingly acquisition targets — or are competing against better-capitalized groups with those same characteristics. Franchise Equity Partners has built a $1 billion permanent minority capital model specifically for profitable multi-unit operators who want institutional capital without a full buyout. The $18.6 billion in deals is the market signal. What you build operationally between now and the next deal cycle determines which side of that market you're on.
- PE acquisition projections: What internal financial projections PE firms used to justify these acquisition multiples — reported deal values are public, but the unit-level economics and growth assumptions behind valuations aren't disclosed. - Failed acquisition data: How many PE-backed QSR acquisitions have failed to meet return thresholds — the deals that make headlines are the ones that close, and post-acquisition performance data is rarely disclosed for private transactions. - Long-term brand health impact: Whether PE ownership improves or degrades long-term brand health — short-term financial optimization is well-documented, but long-term effects on brand loyalty and operator satisfaction are harder to measure. - Five Guys buyback rationale: Why Five Guys chose to buy back franchise locations rather than continue franchise-led growth — the company didn't comment publicly, and the decision remains undisclosed. - Whataburger ownership model rationale: When and why Whataburger established their 85% company-owned model — and whether the decision was driven by quality control, economics, or both.
This analysis cites multiple independent industry sources to provide comprehensive operator-focused research. We reference publicly available data with full attribution and direct links to support our independent analysis.
QSR Research Hub is an independent publication. We are not affiliated with any brand, corporation, or entity discussed in this article and receive no compensation for citations or analysis.
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And subscribe free — get it delivered to your inbox. Subscribe to QSR Research Hub1. Restaurant Business. "Jersey Mike's is being sold to Blackstone." November 19, 2024.
2. Restaurant Business. "Roark Capital acquires Dave's Hot Chicken for $1B and eyes international growth." June 2, 2025.
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5. Restaurant Business. "Why refranchising is good for the restaurant business." April 13, 2018.
6. Restaurant Dive. "Why private equity is buying restaurant franchisees." November 19, 2025.
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8. NJBIZ. "Blackstone completes Jersey Mike's Subs acquisition." January 17, 2025.